Richemont "Destroys" More than EUR 450m of Unsold Watches in

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Richemont "Destroys" More than EUR 450m of Unsold Watches in

Postby koimaster » May 25th 2018, 8:41am

Watches bought back by the group are recycled to avoid them being sold at knockdown prices!


It is not ‘breaking news’ to say that the watch industry faced hard times in 2015 and 2016. Business had been tough due to decreasing sales. The Richemont Group – the luxury powerhouse that owns Cartier, IWC, and Montblanc among others – had also been affected by this situation, as reported by MONOCHROME here. Part of Richemont’s plan to improve the situation was a massive buyback strategy designed to reduce stock at retailers and enable them to invest in new collections. What was not known, until recently, was the total value of watches bought back by the group… According to The Guardian, we’re talking about approximately half a billion Euro/Dollar.

The situation is simple. In 2015, 2016, and 2017, sales of watches declined, including watch brands that are part of the Richemont Group (A. Lange & Söhne, Baume et Mercier, Cartier, IWC, Jaeger-LeCoultre, Montblanc, Panerai, Piaget, Roger Dubuis and Vacheron Constantin, among others). This led to a critical situation for the Richemont Group as sales were plummeting and retailers remained with a large inventory of unsold watches.

https://monochrome-watches.com/richemon ... two-years/
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Re: Richemont "Destroys" More than EUR 450m of Unsold Watche

Postby James Elsener » June 6th 2018, 2:27am

Well, expect at least part of these watches to be sold online on Richmont's latest acquisition the British specialist website Watchfinder (http://www.watchfinder.co.uk).

In May 2017 Richmont bought into the Switzerland based duty-free malls company Dufry from Basel (http://www.dufry.com). They acquired 5% of the world's most important duty-free malls company. In November of the same year they increased their stake to 7.5%. Thanks to the rather aggressive share buy-back program Dufry runs Richmont's stake may easily go beyond the current 7.5% without any further capital outlay.

Together with their online-subsidiary Yoox Net-a-Porter (http://www.ynap.com) which is the world-wide market leader in online fashion retailing Richmont is set to become the first fully verticalized fashion and jewellery/watches company.

A strategy which is hard to copy as there are not that many good targets left. And, of course by controlling the retail side of the business one also calls to a large extent the pricing side of the business. The US$ 450 million they spent on buying back inventory might turn over time into a ready US$ 1.0 billion of cash.
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Re: Richemont "Destroys" More than EUR 450m of Unsold Watche

Postby bedlam » June 6th 2018, 3:57am

Certain aspects of the watch industry have a warped attachment to image that increasingly sickens me.

Displays of affluence are generally gross and they are trying really hard to reek of it.
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